Thanks for coming! I plan to post a lot of interesting articles and comment on a wide range of things-- from political to religious, from private to public, from formal writing on public policy to snippets on random observations.

Tuesday, January 6, 2015

Gaining Ground in the Pursuit of Happiness and Good Government

This is the longer version of an essay that will appear in the IPR's journal; shorter versions appeared recently in newspapers across Indiana...

Over
the last 30 years, Charles Murray has been one of the most influential thinkers
on domestic policy matters. Murray was trained as a sociologist, but has a
terrific understanding of economics and political economy. His work is multi-disciplinary,
readable, relevant, and often provocative.

This
year marks a key anniversary for two of Murray’s books. Losing Ground
is 30 years old now—and was the book on welfare programs in
the 1980s. Quite controversial when published, the book's logic became the
conventional wisdom on welfare policy within a decade. In Pursuit of
Happiness and Good Government is 25 years old now—far less famous, but
arguably a more powerful and potentially important book.

Losing
Ground

Losing Ground (LG) came on the scene in
1984, at a time when conservatives were already bothered by various aspects of
redistribution to the poor—in particular, the inherent disincentives for those
receiving assistance. Murray's book bolstered those arguments and laid the
groundwork for growing concerns about welfare over the next decade.

Most
liberals were still largely enamored with the federal War on Poverty—and downplayed
or dismissed Murray's arguments. Their concerns about welfare would emerge over
the next decade—as they increasingly recognized that all was not well with the
War. They were never as concerned about disincentives. Instead, they focused on
other metrics, such as the impersonal, “dehumanizing” bureaucracy used to
implement welfare.

The
thesis of LG is that welfare changed "the rules of the game" for those
in the lower income classes. The “rules” had been changed by well-intentioned
elites—and the response to those incentives and the outcomes of the War were
not what had been hoped or expected. Four decades and more than a trillion
dollars later, the poverty rate is similar and the problems of poverty are
arguably worse.

An
easy way to see this: $20,000 per year in government benefits will be interpreted
quite differently by those who can earn $30,000 or $80,000. The resulting
disincentives for those with fewer means—to work, to get married, to save, etc.—discouraged
many people from engaging in productive, long-term behaviors. This encouraged a
cycle of poverty, undermining work ethic and family structure/stability. (Murray
develops this theme more fully in his recent book, Coming Apart.Click here to see my review essay on Murray's book and Harrington's classic, 50-year-old book on poverty.)

Of
course, there's more to life than incentives and narrow understanding of economics.
Other social changes also undermined family structure and stability, making
things still worse. The results have not been pretty: lower labor-force
participation for able-bodied males, dramatic increases in children in
single-parent households, etc.

In
1996, federal welfare reform stifled some of the worst aspects of the original
War on Poverty. States gained more control and were encouraged to experiment
with policy design. This new freedom was attractive to states and almost
certainly a better way to implement policy. On something as complex as welfare
policy, trying 50 different things is almost certainly better than insisting on
a single federal approach.

In
particular, states were told to implement “time limits”—to lessen the damage to
long-term incentives. And they were encouraged to use “categorization and
discernment” in doling out benefits—distinguishing between the particular needs
of those in poverty (e.g., job skills, transportation, child care).

Although
welfare policy continues to be problematic, Losing
Ground’s work on welfare’s inherent disincentives still echoes over time. Hopefully,
in the years to come, we will gain more ground than we’ve been losing.

In Pursuit of Happiness and Good
Government

I
learned about In Pursuit of Happiness and Good Government (IPHGG) through
an article in Reason, leading up to
the 1992 election. The editor asked a number of influential thinkers to
recommend a book for the new president to read (whether Bush or Clinton). The most
frequent choice was IPHGG—a book I had not even heard about.

IPHGG
has never been all that popular, because it talks about policy in broad terms.
But its general approach is also what makes it so valuable. In a word, what are
we trying to accomplish with public policy and what are the constraints in
using government to achieve various ends?

In
IPHGG, Murray uses a modified version of Maslow’s hierarchy as his framework:
material needs, safety, dignity/self-esteem, and self-actualization.
Individuals have goals in each category. It follows that government policy
should aim to be helpful—or at least to avoid harm—in each of those categories.

Murray
notes that there are often trade-offs between the categories, especially with
public policy. What if government policy makes a modest gain in one area, but
at the expense of other goals? For example, the government might provide
material support in a way that undermines dignity or self-actualization. This
leads to vital but often overlooked questions about effective policy.

Murray
also describes “thresholds” and “enabling conditions”. “Thresholds” are the minimal
amounts of a category required to have a satisfying life. For example, one
needs “enough” food, clothing, shelter, human relationships, etc.—to survive
and at least minimally thrive. Reaching the thresholds is vital. Exceeding
thresholds can certainly be an improvement, but on average, the gains are surprisingly
modest. For example, people report similar levels of happiness whether they are
barely above or far above threshold levels.

“Enabling
conditions” can be considered part of a government’s responsibility—setting up “conditions”
that enable people to achieve happiness on their own terms. For example,
government should help provide safety for its citizens; might provide material
support up to a threshold for the indigent; and should broadly establish a
general environment in which people can pursue dignity and self-actualization
in their daily lives. Again, getting to thresholds is vital. Beyond that,
government will not be able to accomplish nearly as much—and might easily interfere
with the pursuit of happiness, given policy trade-offs.

With
a more thorough view of personal and policy goals, the possibility of
trade-offs looms large. Early in the book, Murray conducts a thought
experiment: If you and your spouse were to die, would you rather that your kids
be raised by people in Thailand who have the thresholds in terms of material
goods and safety—and completely share your values. Or would you rather have
them raised by Americans who are wealthy but have troubling values? Most people
would choose the former, implying that there’s much more to life and happiness than
access to material standards of living.

Murray
concludes with the role of what Edmund Burke called “little platoons”—the
small, community-based groups (schools, churches, civic groups, etc.) in which
we find much of our support, friendship, resources, etc. In little platoons,
we’re more likely to find fulfillment and true help—not just for material goals
but to pursue the higher ends for which we have been created. State and federal
governments are not little platoons, but they play a vital role in establishing
an environment in which little platoons can be effective.

In Pursuit of Happiness and Good
Government continues to
be a must-read for those who are interested in implementing (good) public
policy. Murray doesn’t provide a ton of answers. But in the context of complex
issues like personal happiness and public policy, asking good questions is at
least half of the answer. If your New Year’s Resolutions include reading on
public policy, put this book on the top of your list.

Op-ed #1: Still Losing Ground?

Over
the last 30 years, Charles Murray has been one of the most influential thinkers
on domestic policy matters. Murray was trained as a sociologist, but has a
terrific understanding of economics and political economy. His work is multi-disciplinary,
readable, relevant, and often provocative.

This
year marks a key anniversary for two of Murray’s books. Losing Ground
is 30 years old now—and was the book on welfare programs in
the 1980s. Quite controversial when published, the book's logic became the
conventional wisdom on welfare policy within a decade. In Pursuit of
Happiness and Good Government is 25 years old now—far less famous, but
arguably a more powerful and potentially important book.

In the first piece of a two-part series, I’ll discuss the importance of Losing Ground. In the second piece, I’ll
discuss In Pursuit of Happiness and Good Government.

Losing Ground (LG) came on the scene in 1984, at a time
when conservatives were already bothered by various aspects of redistribution
to the poor—in particular, the inherent disincentives for those receiving
assistance. Murray's book bolstered those arguments and laid the groundwork for
growing concerns about welfare over the next decade.

Most
liberals were still largely enamored with the federal War on Poverty—and
downplayed or dismissed Murray's arguments. Their concerns about welfare would
emerge over the next decade—as they increasingly recognized that all was not
well with the War. They were never as concerned about disincentives. Instead,
they focused on other metrics, such as the impersonal, “dehumanizing”
bureaucracy used to implement welfare.

The
thesis of LG is that welfare changed "the rules of the game" for those
in the lower income classes. The “rules” had been changed by well-intentioned
elites—and the response to those incentives and the outcomes of the War were
not what had been hoped or expected. Four decades and more than a trillion
dollars later, the poverty rate is similar and the problems of poverty are
arguably worse.

An
easy way to see this: $20,000 per year in government benefits will be
interpreted quite differently by those who can earn $30,000 or $80,000. The
resulting disincentives for those with fewer means—to work, to get married, to
save, etc.—discouraged many people from engaging in productive, long-term
behaviors. This encouraged a cycle of poverty, undermining work ethic and family
structure/stability. (Murray develops this theme more fully in his recent book,
Coming Apart.)

Of
course, there's more to life than incentives and narrow understanding of economics.
Other social changes also undermined family structure and stability, making
things still worse. The results have not been pretty: lower labor-force
participation for able-bodied males, dramatic increases in children in
single-parent households, etc.

In
1996, federal welfare reform stifled some of the worst aspects of the original
War on Poverty. States gained more control and were encouraged to experiment
with policy design. This new freedom was attractive to states and almost
certainly a better way to implement policy. On something as complex as welfare
policy, trying 50 different things is almost certainly better than insisting on
a single federal approach.

In
particular, states were told to implement “time limits”—to lessen the damage to
long-term incentives. And they were encouraged to use “categorization and
discernment” in doling out benefits—distinguishing between the particular needs
of those in poverty (e.g., job skills, transportation, child care).

Although
welfare policy continues to be problematic, Losing
Ground’s work on welfare’s inherent disincentives still echoes over time.
Hopefully, in the years to come, we will gain more ground than we’ve been
losing.

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About Me

First and foremost, I am saved by God's grace as manifested most clearly through the atoning death of Jesus Christ-- and thus, adopted into His family. As a result, I increasingly seek to extend His grace to others in my daily life. On the home front, I am a husband and father to four young men (two by adoption and two the more conventional way). Professionally, I am an economist who loves to teach and is active in public policy circles. Vocationally, I am an active writer and the author of three books (one on the book of Joshua; two on public policy-- one secular, one Christian). Finally, I am the co-author of a 21-month discipleship curriculum, Thoroughly Equipped (and a lighter 36-week version), for developing competent lay-leaders in the Church. Related to that work, Kurt and I have two books, Enough Horses in the Barn and Roll Up Your Sleeves.